"I am one of those who do not believe the national debt is a national blessing...it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."
—Andrew Jackson, letter, April 26, 1824

Friday, December 31, 2010

Here is a present for you bears. This chart should indicate what all of you have been waiting for all year. I regretfully can not cal a top here in the face of the Fed's mandate and POMO, but in any normal instance I would most likely be doing so.This is the second chart in my chartbook.

Thursday, December 30, 2010

Bears better make hay today and in the shortened session tomorrow. POMO comes back with a vengeance on the 3rd. Remember not to fight the Fed. Benny and The Ink Jets has promised to keep the markets afloat and he's doing a fine job with that so far. Bears may get a hand when the Fed must support the muni markets in '11 with a heavier hand. Other "needs" will begin to rear their heads in '11 as well. Supporting the EU will become a major issue. All this leads to a flat controlled market with limited upside from here.

Bears will have to remain patient. I believe the econ indicators and earnings will begin to weaken in early '11 and then really fall off later in the year. This will damper markets but not cause the crash. We're gonna need the exogenous or external event I have been calling for to end it all. When that finally happens it will be a game over situation, and I'm looking for martial law to be in effect soon after.

Martial law Shanky? Seriously? Yup, when the SS and pension systems totally collapse you are gonna see the FEMA camps come alive as all the pent up frustrations finally boil over. They can possibly extend this nightmare till 2012, but I have my doubts. I believe the markets will top in February or in the summer and when they do you better have fuel and food. I plan on doing a big write up for the new .com blog for 2011 predictions.

I will be consolidating everything into a new .com site that will be better for everyone. More info on more topics that will free me up to have a broader base. Calling the markets and charting will be primary focus, but getting back into ranting and writing will be much more prevalent. Spreading the news and enlightening the readers will eventually become more important than anything (as long as that will be allowed by the government). With what I plan on writing and posting, I suspect my "handler" (if not already) will have me flagged and a room at the nearest FEMA facility ready for me to occupy.

Thanks to everyone for another great year on the blogs.

Daily SPX - Setting some sort of top. I am in the camp where we need a slight corrective of some sort and then one last pop before overbought/fraudulent conditions finally catch up with reality.If that MACD crosses it should trigger some sort of selling. Divergences are prevalent indicating overbought conditions. Even the weekly charts are becoming extended overbought.

Wednesday, December 29, 2010

On vacation all this week so minimized posting. Sorry. Still keeping the Dark Side up as much as possible with intraday charts and calls. Link is on the right.

Dollar and SPX - Corelation is dead. The PPT POMO team are winning.

Weekly SPX - I don't think it gets to the upper diagonal at this time. It is in my target box that some struggled to believe possible. I have 1283 as my target. Looking for one last corrective then the top gets set. Daily chart divergences are nasty and the 60m looks pretty bad. I finally started putting on some shorts yesterday (SDS and TZA for this ST corrective I am expecting).

Tuesday, December 28, 2010

Just starting ski vacation in CO and working on a computer that needs a lot of help. I should be up and running just fine this afternoon. Plan on doing several posts on dollar, oil, EUR and more.

SPX Daily - I think there will be one last small corrective and one final pop. 1283 has been a good target all along. As I have been saying all bets are off after Xmas and I have been forecasting a top in late Jan early Feb.

Monday, December 27, 2010

Today is a travel day for Shanky. Headed to CO to ski with the family. I will be working each morning as the time change will have me up bright and early. I'll be hit or miss in the afternoons. If the markets are hot and moving I'll be here for sure.

I hope everyone had a great Christmas. We had a special one here in GA as it was my first white Christmas ever (first in over 100yrs on GA). Good omen? Mama got a .38 cal with a lazer sight and the kids got .22 pistols!

China raised rates. Not sure what this week will have in store. Earnings season starts on the 10th with AA. It is after Xmas and all bets are off . I'm thinking late Jan - early Feb for top spot, but it can happen any time and could be in.

Gonna be time to buckle down and get really serious after the 1st. This is gonna be a big year. Defaults, violence, market crashes. We're all gonna have to be on our games.

Thursday, December 23, 2010

Boy this market looks sick. Will my all bets are off till after Xmas call make it to the big day or do we top before (like yesterday)? Either way it is time to start looking at what the fib retracements are calling for. That 5=1 measurement of 1283 is in the neighborhood. Stopping just shy would not disappoint me. Based on the counts we should be very close, but there is this slight problem called the Fed and POMO. Gambling that a manipulated and controlled market that has destroyed divergences like Optimus Prime beats on decepticons has proven to be a fools game, but maybe this time will be different. I'm still a believer that my external event will be the catalyst. It may not mark the top but it will be the one event that will send the markets into that final tailspin they will not recover from.

SPX Daily - Little different view than yesterday. Look at this chart closely. The support line under the MACD and the TRIX (not drawn) are running out of room. Looks like February will be the max (who's been calling for the top late Jan/early Feb with an all bets are off after Xmas kicker?) $BPNYA is above the red market top line. Divergences are everywhere in a market that should have (would have under any normal circumstances) topped back in November after the QEII announcement. We're in some extreme conditions up here.

My CPC chart is quite ominous for the bulls. We're close.

Note the dollar is butting it's head against the $81.11 resistance level. $80.65 support here. Has been range bound the past week. The dollar and SPX are running together. This is not standard operating procedure.Something should give here sooner than later.

The 2007 highs are not that far off which should be disturbing to all except the Fed (bubbles do not exist to them). Divergences all over the place with over bullish sentiment are the norm these days, but they keep on pushing the bar higher. EOY prints will be where they want them if they can keep this up. The struggling hedge funds are working overtime to get their heads above water (like some here, the smartest in the world all got burned being short).

Santa comes tomorrow night. I hope he has something good for you. I also hope you are enjoying the season. GL!

Wednesday, December 22, 2010

IF you believe this country is actually growing I have some ocean front property in AZ for ya at a bargain price. To witness what it must be like to live under a socialist government that controls everything is quite fascinating if not frustrating. Knowing the reflation experiments will ultimately fail and cost us more than reserve currency status is quite horrifying.

Last week I was looking for a higher high to set a divergence (or should I say another or worsened divergence since the divergence that was set after the last fall was not worked off). Minis up over 4 at this time. Minis 60m are apparently following the 50% channel line and have been for some time.

SPX had been after 1247 twice last week and failed to set a higher high. Maybe that pop this morning will get 'em there. Looking at the two holiday weeks last year this Monday was it, then poof goes the volume. Next week was quite interesting. Not saying there won't be any trading opps or that big moves are not possible. Just saying that most are worried about other things and enjoying the season.

SPX 60m - See the divergence I am looking at with this pop? The daily is there as well.

Speaking of enjoying the season, I will be in and out all week as I have some shopping, hunting, a day trip to the ATL and a few other things going on. I plan on doing morning posts and covering the mornings live all week. At some point next week we'll be hitting the annual pilgrimage to CO. Flight has not been scheduled yet, but we'll be there thru New Years. I do report and work from out there as well.

Friday, December 17, 2010

Opex, holiday Friday, schools out down here today (which means I may start slacking the pre-market some but not the trading hours), important earnings are completed (except for NKE) till Jan 10th, all add up to traders maybe slowing down some. EOY prints are still a priority. Maybe some more insider selling. POMO could be distracted to other areas needing support. Spain and the PIIGS are blowing up. After Xmas all bets are off. 2011 will be the year. They can not extend and pretend much longer. 2012 will be much worse.

Economic Calendar - Nothing today in observance of the Quad Opex other than leading indicators at 10:00 which will be rigged by the BLS ao you should ignore them anyway. Please ALWAYS check the calendar.

POMO Schedule - POMO lite today. Only max of $2.5B. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

Tax deal done and markets are not liking it. I thought ORCL and RIMM earnings would possibly boost the futures. I thought wrong. I want to think this 4th wave has more to go. Based on time I think it needs to be stretched some to get the top of 5 out a little further. This does not necessarily mean down more, but it could. Still targeting 1283. You should know the topping measurements have us in the window already (it is a big window), so there is a very, very, very distant outside chance a top is set.

SPX 60m - the fall felt large, but in the scheme of things we've retraced nothing. This run IMO is weak based on the fast that price is 3 points off the top but the indicators are lagging horribly. If we gat any pop to a higher high the divergences would be dramatic.

I'm thinking it will be quiet today. Minis have defined support diagonal I showed yesterday on The Dark Side. 1250 is resistance diagonal and 41 is resistance. If the minis can get thru 1230 to the downside a significant move could happen. I'm thinking today will stink and trade in a narrow range.

Thursday, December 16, 2010

The charts look nasty. If the Fed can be distracted by the bond markets and the EU bailouts there are not enough funds to save all. They can't print it fast enough and the Ponzi will finally die. All of this is happening now. I have come to the conclusion that there is a good chance that the top is set. At this time we have to consider the only two scenarios left - top is set or there is one more pop left in their arsenal. Those waiting on a failed treasury auction to mark the top will be to late. That will be the final shot to destroy the Fed and treasury's Ponzi economic system.

POMO Schedule - We got a new schedule Friday and the biggest surprise was there will be two POMOs on the 22nd totaling a possible $17 billion. Yet another POMO day today. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

The divergences on the daily charts and the position of the weekly charts combined with the overbought conditions and the euphoric bullishness is the perfect storm. The recent earnings misses are a tell I believe. The biggest being the FedEx miss. One has to ask, how did we have a great inventory build and superior internet shopping and FedEx miss? This leaves a massive hole in their economic rebound story that leads me to question the validity of all the BLS data even more than before.

As for counts or position of indexes, they are all over the place. Who is leading? Tough call, but I believe the RUT is possibly as it counts a full 5 ahead of the SPX. Now, ignoring counts (which I strongly encourage - remember I use them, but rely primarily on TA for all calls) they are in a similar position. The financials fell first againfor the third time. how many times can they collapse and recover? This will be the third such instance recently if it recovers. That trend can not continue.

Remember the DRYS trade I gave you two days ago when it was above $6.40. Now trading below $6. the BDI is still falling and DRYS should revert to at least trade near it's index. Keep an eye on that one.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3186525&cmd=show[s204970999]&disp=P

SPX 30m This move has been tiny, but it feels massive. I mentioned the 1235 support yesterday and price is stalling there right now. Futures were up till FedEx and are now basically flat. I count a completed 5 off the top and think we should get a corrective of some sort here before further weakness. Right now I am targeting 1220 if not worse. Let's walk this thing down and not get carried away. Remember we have to treat this as the top is possibly in, but are expecting one final leg to the top.The 200ma on this 30m chart is my target (or the 50ma on the 60m). Watch that TRIN here it is getting up where a possible buy signal is coming. That would signal the corrective or the bottom of this move.

POMO Schedule - We got a new schedule Friday and the biggest surprise was there will be two POMOs on the 22nd totaling a possible $17 billion. Yet another POMO day today. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

There was no POMO yesterday. There is POMO today. That may make a difference. Minis down a bit but off their lows.

We have seen wedges bust before in the past year that meant nothing. All the market did was reset the lower support diagonal and extend the run. POMO, fraud and manipulation have a funny way of masking greater issues of reality and placing fantasy front and center. Look at the runs off the Feb and Aug lows and compare or fractal them to this start. All I am saying is tread very lightly into any short scenario until it is confirmed.

SPX daily has some extended divergences that are similar to those that led to the April top. What is different this time? the Fed was PULLING liquidity then and is still pumping it in (at a higher rate) here. So there have been some reversals in indicators (that in any normal market would have marked a top in November after the QEII announcement blow off move) that indicate things may be different temporarily. The TRIX, BPNYA and the MACD turns up here are screaming extreme conditions (all driven by intervention). I like the NOYM turning and possibly holding the divergence line here.

SPX 15m - The best look at the busted wedge support (possible backtest?), the gaps and fibs.There is still a 5 up to come IMO after this corrective finishes. Looking at 1283 for the top right now.

Dollar, bonds and POMO are the market movers. Global turmoil is coming and we all know it, but will remain in our state of denial and ignore it till it smacks us in the face (and at that point it will be too late - it is actually to late already). Gold and silver are falling still. As bond yields rise, I expect the rotation to continue (possibly the worst trade you can make right now unless you plan on selling (paper) high and buying it back lower). Oil is at 87.16 support and spiking under it here. Keep an eye on that.

SPX set a lower high and low late yesterday. The RUT and COMPQ look the best at this point as far as trends go and appear to be leading. The DOW is screwing with everything having set a higher high yesterday (it was also the only one to set a lower low when SPX hit the 1173 bottom), it may be the fake out index.

Possibly a completed 5 down yesterday on the SPX. The 1240 area was recaptured. The counts all say more downside is to come here and possibly some sort of major top was possibly set. The screaming bond market, the actions of the dollar and the effects of POMO will be the markets rudder, not the indicators. Things are not good and the larger issues are finally moving to a position where they must be addressed and can be ignored no longer. At this time I'm considering consolidation in a range to down, but up should be out of play. Let's see what form delivers.

Tuesday, December 14, 2010

For those that do not follow ZH on twitter you are missing out. The one liners are tremendously humorous and inormative. Like, "With 67.5 million shares, Best Buy Chairman Dick Schulze has lost $320 million in the last 28 minutes". Nice! I guess the FASB fraud does not extend to retail (yet) like it does to a TBTF. Something tells me BBY does not qualify for GSE status either. CNBS spinning electronic sales not important? Hell all we buy these days are electronics.

Silver and gold, silver and gold, getting hammered this morn. Silver and gold getting hammered, on every Christmas tree. Dollar bouncing off channel support OR it is a larger head and shoulders about to let go like all get out. The last HnS we pointed out last week played out right to channel support as we thought. Can it break down here as part of a larger HnS? Dailys oversold. Might not work this time.

POMO Schedule - We got a new schedule Friday and the biggest surprise was there will be two POMOs on the 22nd totaling a possible $17 billion. Yet another POMO day today. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

SPX 30m - just a clear view of the wedge that has lost support.38% retracement is at 1218 and the 30m 200ma is at 1210. Those should be about right for a pullback here unless things get worse. A larger retracement to the 1180 level should be in order if the form and wave are complete. Of course that is betting against POMO and that is not a smart thing, so we'll take baby steps and stick with the targets above 1200 for now.

Respect the bunch! I like it when things bunch up like this at tops or bottoms. Usually indicate a possible ST or LT trend change. Right now we're dealing with ST.

Looking at the BDI/DRYS relationship - draw your own conclusions here. It is 20% move just to get to fill the island gap and the 38% retracement. to get to BE with the BDI.....58%

SORRY - I for got the chart - oops.

Let's stick with targets above the 1200 line for now and not put the breakdown cart ahead of the horse. A proper move would take us to the 1180 range, but I'm not willing to go there will after Xmas. Might be time to consolidate and form a range. That would be my best guess, unless the EUR falls apart and then all bets are off.

Yesterday we discovered that the Fed and Treasury may have been supporting the broad EU (as we expected and called) with the first month of missing POMO from right after the QEII announcement. you taxpayer dollars are now going global and not thanks to only the military anymore! Merry fing Xmas PIIGS! Don't see any reason for them to thank us as a continuation of the global Ponzi will only make things worse down the road.

Monday, December 13, 2010

Most important post this morning is the most recent from Zero Hedge With Bond Yields Continuing Their Push Higher, What To Expect For Stocks Next? "So no major surprises: with one exception, the market tends to run into a bond hike, only to realize that such moves end up being driven by permissive monetary policy and rarely by actual economic moves (assuming fundamentals news is even remotely relevant to market formation... the alternative of course would finally put an end the seemingly endless fallacies spewed forth by every Chicago school of thought). And unlike now, at least in the past the US was not saddled with an amount of debt that on a gross basis is substantially greater than GDP. Sooner or later the market will finally need to come to grips with the realization that it is the jump in yields that is the black swan, nothing more and nothing less." And there you have it. Time is running out for the bulls and facilitators of the re-inflation trade. Just sit back, be patient and wait for the fireworks that should happen sometime by mid 2011.

Economic Calendar - Nothing today, but the rest of this week is pretty busy. Please ALWAYS check the calendar.

POMO Schedule - We got a new schedule Friday and the biggest surprise was there will be two POMOs on the 22nd totaling a possible $17 billion. Yet another POMO day today. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

Markets reacting to the Far East this AM. Markets are overbought setting divergences. The ISEE Friday was at 230. This is severe nosebleed levels. As mentioned towards the end of last week the TRIN, CPC and several other indicators were extremely toppish as well. Some of these indicators are new to the game that we did not experience in the Sept, Oct run up (that we're still in I guess since the markets are not allowed to correct). Combine that with the screaming 10yr treasury and you are getting a nasty brew for the markets. Alas, there is this one thing called POMO. The cure for all that ills the markets. Don't forget the HFT algos and lack of regulation.

The FAS catchup trade we had been discussing over the past couple of weeks cam home. I like it when this chart bunches up. Usually indicates a turn is near.

SPX Daily - The screaming TNX is seen plainly on this chart. So it the screaming SPX. This is not normal and should indicate a turn in one or the other. Since the bond market rules the roost, it is suggesting the risk off trade is not far away if not on. What is setting up here is a nice head for a HnS formation. Top for 5 (THE top) down for 1 to the black neckline, up for two for the right shoulder and then kaboom the markets bust. Looking at a similar move off the top here that we saw in April. The question is will QEIII have the same effect as the promise of QEII off the August lows? I doubt it, especially since the treasury ceiling will not be raised again in April (or so they say). That will be end game, meet you maker, time to take the medicine.

So the Shanky call of QEII pop, drop, and ramp into Xmas then all bets are off is spot on right now (it has been spot on since The Bernank announced QEII. Don't fight the fed. Follow the POMO trade is still on thru the holiday season then all bets are off. YE statement prints are part of the game now. Tax law issues are apparently behind us for now.

I am expecting some sort of pullback or consolidation soon. Maybe the data this week will dampen some holiday market spirits.

Friday, December 10, 2010

Nice chart on CNBS this AM, the NASDAQ has been higher EVERY DAY THIS MONTH. Ahhhhh, the new normal where nothing is allowed to fall especially going into Xmas. Outside of a mob attacking Prince Charles and his mistress (oops wife), wiki attacks, TSA gropings and a plethora of other negative sentiment, I'm positive the Consumer Confidence numbers will be sterling.

POMO Schedule - NEW SCHEDULE TODAY! The only suspense is how much more and when! Yet another POMO day today. Have no fear cause there is still over $500B to go. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

Markets are overbought and trading at resistance levels from 1233 to 1235. You have to ask, does that really mean anything in the face of a POMO driven HFT algo run market mandated by the Bernank to do nothing but go up? The shorts (those few die hard morns that are left) keep getting crushed and remain in disbelief that the markets will not fall. It is not hard to figure out when you listen to the master printer tell you the markets will only go up.

SPX 60m - divergences are pretty nasty, but remember these are highly unreliable. Best I can say is that the markets are overbought and the rally is (based on the SPXA50 falling) narrowly focused and not broad as one would expect.

I'll deliver my CPC chart today that has been a descent predictor of market tops and bottoms. I have speculated that after Xmas all bets are off and that the market would top next in early February. Looking at this chart, that about fits the time frame, although we have entered an area that the market can turn at any point. So, a top of some sort is nearing.

I hate the VIX (seen just above this). I know it is busted and has been for some time, but I am going to start watching it and those lows. No that is not a giant HnS pattern that is going to target negative 60. I will be interested when it gets to sub 16. At that point let's look for the VIX to start rising with the markets to set a telling divergence.

Markets at resistance and consolidating. I'm still on the consolidation train. Range bound action between 1220 and 1235 may be the norm thru Xmas barring some failed auction or another mob attacking another dictatorial elitist. I hope you have a great weekend and ask that you remember the reason for the season (whatever season you are celebrating).

Thursday, December 9, 2010

The best news of the morning (and for some time now other than some hackers trying to take down the establishment) is that It's Official: Ron Paul Is Head Of Monetary Policy Subcommittee. Things could get interesting in DC with Ben now having to face down his greatest (and possibly only) nemesis in DC. For those of you not following the wikileaks wars on the internet, I suggest you do on twitter via @Op_Payback for all the blow by blow. Fascinating stuff to me. Santelli just reported non-seasonally adjusted jobs numbers takes the employment figure to over 500k if I got that right. Sorry Liesman was not there to have a fit over Rick reporting that.

Our lovely friends at ZH report Arms (TRIN) Index At Most Extreme Deviation Since 1956 "With the S&P at a 52-week high, this is the most-extreme deviation in the Arms Index since 1956." For those who foolishly believe that technical indicators "indicate" anything anymore in a market in which there is just one player left, may want to be concerned - all the other times such an extreme deviation has occurred, any short-term gains were erased during the months ahead." Which fits nicely with my thoughts that after Xmas all bets are off regarding the markets and that I believe in early to mid 2011 we turn for good.

POMO Schedule - Yet another POMO day today, but have no fear cause there is still over $500B to go. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

Pivot Points - For what they are worth in this busted market. Minis gapped down after the close yesterday and have obviously recovered. 1226 has gone from resistance to support. The HnS pattern that would have projected 1200 is still alive but has lost symmetry. 1235 is the top of the recent trading range. Today is similar to yesterday in that the minis were down then up. That tends to lead to an up then down market. Nothing is guaranteed of course. Just considering at trends. The SPX rising wedge we were following yesterday that looked to be a corrective might prove to be something different. Markets are really tough to read right now with varying patterns across indexes. What jumped out at me yesterday going thru the charts was the possible triangle on SPX (black dashed) indicating more upside from here rather than a stronger corrective we were considering. I am also considering the possibility that recent trend of consolidated range bound trading may continue here (form a rectangle) as the SPX may remain in the range of 1235 to 1220 for the remainder of the year.

Looking at the $DJUSFN's improbable rise we find first yet another busted head and shoulders pattern that have been prevalent across many indexes as the Fed POMO run ramps jeep destroying technical setups. We see busted LT resistance. We see the 61% retracement held price the break at 280 and now just above there is the resistance diagonal and that 280 level as well. Indicators are overbought.

SPX daily - Possible divergences being set. Not sure what this chart will look like as blogger is not cooperating at all. Bottom line is that it remains overbought but as seen in the past POMO can drive this as far as they want to.

So, we're looking at a possible breakout today. Would be some sort of 5th wave or the second 2 of a 1,2 1,2 pattern if triangle resistance gives way. Indexes are all over the place and finding a leader or consensus is not possible right now making things very difficult. I believe at the top of this next pop we'll get some notable consolidating and then a tradeable trend will be established.

Wednesday, December 8, 2010

It appears the yield curve is coming to the bears As Ten Year Sell Off Accelerates, The Bond World Is Flat we all know a flat or inverted curve takes risk off. (also read this and this from ZH). The timing of this works well for my thoughts of the markets topping early next year. The bond vigilantes are rarely wrong. Keep an eye on this development. May force some redirection of POMO funds thus leaving the door open for the bears to gain some ground.

Nic Lenoir had a really bearish post last night on ZH as well. The Market Is Hurting For A Squirting is an unusually outspoken well charted post looking across asset classes at a very bearish scenario for the markets. Dr. Mr. Speaker is a post from Mish on his Emails sent to House Speaker John Boehner in regards to Ron Paul and the chairmanship of the Monetary Policy subcommittee. Please read this and follow the email links.

Gold and silver are getting crushed.Oils is thru but fighting with $87 resistance as it channels up. there are divergences showing up on it's daily indicators. Tough call on where the EUR/USD pair is headed. Is there another larger leg down to come or is there a slight pop then further weakness? Same but the inverse for the dollar as it travels up busted channel support.

POMO Schedule - Yet another POMO day today, but have no fear cause there is still over $500B to go. (We'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.)

All the indexes are charting different patterns. They are also all over the place as to who has set new highs or lows. Finding a leader is proving to be difficult. The minis had a nice channel going that has busted and price has fallen to 1216 support and now bounced to 1226 resistance. What happens at this level will be interesting. Will the potential head and shoulders formation play out and give the bears a breakdown to the measured 1200 level? Keep an eye on this possibility. I will note that all the HnS patters recently (especially the really big ones) have been snuffed out and have tended more to break out than break down.

SPX 5m - simple chart to show the wedge that I believe was in play. It has busted support. Now, the last time (September) we has a wedge form I lowered the support diagonal three times before the final form showed its self. In a POMO driven market you must be conscious of this possibility. Looks like a clear 5 wave move has completed and were in correction mode now. I am targeting 1207 at this time with 1200 as a second target.

The dollar ran up a bit last night and short term may want to climb a bit more. The bond markets are the nes to watch. Keep and eye for movement in the shorter durations. If they continue to climb the risk off trade come on and the markets will not like that. This could work badly for gold and silver as well (which would make JPM happy).

Lets see how this corrective plays out. Should be a 2nd wave, but in some cases it counts as a 4th wave. they both are corrective down moves. the big difference is one only has one pop left to the top and one has two pops left.

Tuesday, December 7, 2010

Tax law resolution makes the markets happy, Assange arrest makes banks happy and the Europeans puss out on a bank run, that is a triplee doozie for stocks. Throw in a little magic POMO pixie dust and we may have another 25 point ramp today. Minis almost half way there already. Fear - what fear as /SI (silver) gets to $30.75 and /YG (gold) sits at 1432 (that was a joke). Like that little piggy that went we we we all the way home the markets are gleefully ramping and do not appear to want the party to stop.

From the 1040 low my call has been spot on. Ramp to the QEII announcement, euphoric pop, drop and now the ramp to the top is all that is left. After Xmas all bets are off. POMO to infinity is the play and the Fed has told all of us they will keep the markets afloat and use the markets to benefit all. You should not be doubting them at this time. I was originally thinking February for the top and still am, but may need to extend that to summer. Bottom line is we are in the last leg up. Big question is what will be the "external or exogenous event" I have called for for over a year now that will finally rip the markets from the Fed's control? Another question is does this move end at a measured 1283 or over 1300?

EUR/USD looks to be in a zig-zag corrective that may have a little bump down to go or it has completed the corrective and should be ready to move higher from here. Either way it is going up and so will the markets as the dollar falls on the other side. IMO the dollar after backtesting the busted channel looks set to continue it's slide. The only confusion now looks to be if the dollar might have one more pop up in it or not. Looks to me like the dollar is in or completing a th wave and still has a 5th to come. That fits well with where the markets need to go to finish this last run to the top.

SPX Daily - The divergence in RSI5 may be telling that things are due to slow down a bit. The MACD bull cross above zero tells us that an already overbought market is getting even more so. RSI14 and S Sto are entering areas where they can top, but still have room for much more upside.

Daily index comparison chart - The 30m comparison chart is all bunched up indicating a turn of some sort after this pop. this chart however may need for the financials to catch up to the pack before any sort of major turn can happen. we're not over euphoric at this point.

USD and SPX comparison - Barring some sort of loss of inverse correlation it looks to me like the dollar's fall may have a chance of continuing. We all know the Fed would like this. Commodities seem to be getting toppy and that may damper the rate of climb, but climb they should if the dollar continues to weaken. The markest should continue to climb as well. After the first of the year the dollar/SPX may directly correlate as the Fed may lose control of the currency. When that happens it is game over.

Pop n Drop? Don't know. Odds are pretty good markets pop and then go flat the rest of the day, so if you don't trade in the first 30m you can just go home. Hey, that has been a trend recently on the big opens that are not deserved, have little merit and simply peter out. The daily SPX and daily RUT are on two different planets. My 30m comparison chart is all bunched up. Maybe we need to see if the financials can catch up on the daily comparison before we get the next sell off. Divergences are obvious, but we saw the 30m divergences get abused 8 consecutive times in September. That was a 3rd wave and this is a 5th, so things should not be that extreme. As for now the Xmas ramp is on like Donkey Kong. Not sure what news is out there that can slow the bulls momo at this time. All we can do is wait and look for signals. At this time I think this is 5 of 3 or possibly 1 of 5.

Monday, December 6, 2010

Really looking forward to see how successful the EU bank run will be tomorrow. We'll wake up to some effects of this in the morning. Bailouts galore still continue. Must have stimulus risk on trade is what it is all about. they have not even gone thru the first $100 billion of the $600 of QEII and they are already talking QEIII. Things are great! Of course there are no worries of a double dip, the friggin economy is a zombie hooked up to the ponzi/fiat machine. It won't double dip, it will just collapse and disintegrate.

AUD/JPY is consolidating and has busted correlation from the SPX. the dollar is backtesting the busted channel support here and is just under it's 80.11 resistance. The EUR/USD has completed a 38% retracement of the last fall and is reversing. So dollar up and EUR down over the weekend, might be time for those trend to reverse.

Minis trading at 1216 support and have been range bound since Thursday between 24 and 16. If 16 cracks 12, 07 and 00 are the major support levels.

I love it when my comparison charts bunch up like this at the top of the bottom. This is the 30m comparison chart. Usually indicates trend change of some sort. The daily comparison still has the financials lagging significantly.

Even the 60m chart is getting overbought now. Of course we have learned that this means nothing in this manipulated POMO driven market (other than POMO is real and effective and dangerous to shorty). Possibly 5 waves completed for 1 of 5. That bull MA cross there should indicate more strength to come.

Bottom line is where we are in the count a period of consolidation should be upon us. SPX support levels are 19, 07 and 00. Don;t think it gets blow any of those. Lot's depends on tomorrow's EU bank boycott. So, let's go with the futures (down 5 here) indicating some sort of turn, and then see how the EU plays out coming into the open tomorrow. Not sure if the bears can get any real momo going vs this POMO/fiat market. Should be a dull to down day.There are 15 (FIFTEEN!) open 1m gaps above the 1173 low. Let's see if some of those can get filled.

Here is something I did on current market levels for the Darkside this AM where I post lots of charts during trading hours.

SPX got within 2 points of it's November high and is trading above the 1219 April high.

DOW is about 60 points off it's November high and is trading above it's 11258 April high.

NASDAQ is trading at it's November high and did take out the November high and is trading well above it's 2535 April high.

RUT has left earth's atmosphere and is in orbit. The index that lagged taking out it's April high 749 has now dusted that and is 18 points above it's November high of 739.

Friday, December 3, 2010

Monetization Bitchez! ECB Intervention Continues: Trichet Accelerates Portuguese Bond Buying, Forces Short Squeeze "That's what Christmas is all about Charlie Brown." To you blockheads that don't get it, fiat expansion, sucking up and hiding bad debts and manipulating stock markets to bring Christmas Black Friday joy to all (even the TSA "handlers") is everything and there is nothing else. Jobs data was a bit confusing. My thoughts on that are the Dems needed a boost to prove the Bush tax cuts must go.

Jobs report - Liesman calls it "another head fake" Puhlease. Wow, Liesman actually showed the U6 number for unemployment at 17%. Did not know they knew that statistic existed. Pissonme just said QEIII is now much more likely so buy the markets! Payrolls Huge Miss: +39K Compared To Consensus Of 150K, 9.8% Unemployment Rate from Zero Hedge puts it best, "And so the myth of the recovery can suck it."

Minis fell from a high of 1227.25 which overnight finally took out the November QEII announcement highs and fell in a "flash" to the April high support at 1216. Below 16 just like on SPX you have 1207 and then 1200 support.

Dollar - cracks support this morning on EUR surge (cause monetizaton will do that). Here is the /DX long term. Please note the $79 support/resistance level going back to '08.

Even more - As noted above in the first chart the $79 S/R level (red) just cracked. With the EUR surging on Trichet's money binge (just now catching up with the Fed's policies in a last ditch sign of desperation to save the EU banks) the dollar may want to head back to backtest the busted green diagonal. This would mean more strength for the markets.

EUR/USD - Time for a surge back to $1.42, or just a backtest of the busted channel support?

SPX 30m - Pointed hard at this chart yesterday saying some sort of corrective was overdue. I must add that this 30m charts and the numerous divergences were blown thru in the 3rd wave and it meant little to market timers thru September and October.

The daily SPX bull MACD cross late yesterday (above zero!) will get whipsawed at the open this morning. Today is a light POMO day (but have no fear there is plenty more to come!). 1219 will be cracked at the open. I would expect a backtest of that level and then all bets are off at that point. If it gets back thru up up and away we continue. If not you have to look at 1207 and then 1200 (1195 at max worst). Wave 5 up has started. this is a 5th and not a 3rd, so it will not be as powerful as the run thru September and October. It is the march to the ultimate top though. Bears better enjoy this brief move south. I'll be loading up long at the bottom.

What the government gets and what the sheeple are slowly beginning to understand is that this is the great wealth grab. The banks are taking everything. the system is out of control and until law is restored this trend will continue unabated and the middle class will be wiped out. What you really need to be looking out for is the vote on the repeal off the bush tax cuts. If they change the tax law I believe there will be (and there already is based on insider selling) a rush to dump low basis legacy positions of equities (do you want to pay 15% or OI?)

GL, happy Hanukkah, happy holidays and have a great weekend.

Linus Van Pelt: "And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid. And the angel said unto them, 'Fear not: for behold, I bring unto you good tidings of great joy, which shall be to all people. For unto you is born this day in the City of David a Savior, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.' And suddenly there was with the angel a multitude of the heavenly host, praising God, and saying, 'Glory to God in the highest, and on earth peace, good will toward men.'"
[Linus picks up his blanket and walks back towards Charlie Brown] Linus Van Pelt: That's what Christmas is all about, Charlie Brown.

Thursday, December 2, 2010

So much to bitch about and so little time. EU is now back in their cage and should not be heard from for another 6 weeks, which will free up the markets and POMO to continue the ramp to infinity and beyond. The ramp job yesterday was classic intervention. All is well, so well the markets ramp 22 points in the first 5m and get a 3 point follow thru the next 6 hours and 27 minutes. That is confidence I tell ya.

Talking heads spewing their crap in overdrive this morning on CNBS. Liesman discussing the upside to the jobs report is disgusting at best. Not so sure why I watch anymore. They have moved to tragicomedy status and honestly have become more painful to watch (even Mandy is not doing it for me anymore). I guess it is kinda like watching Jenna Jamison go at it for the 500th time, it gets a little tired.

POMO bitchez! POMO has apparently returned from it's one month hiatus while funding the muni-markets, the IRE bailout and pumping funds into the IMF for Spain. What an entrance, even Liberace would have been impressed with the morning woodie they put in that first 60m candle yesterday (but certainly not with the way it petered out the rest of the day). Can the markets follow thru? The 30m charts say a corrective is due here. Possible base channel forming indicating much more upside to come. Looking for 100 to 1195 as pullback targets. Something to note is the RUT is the only major index to have not taken out its April highs. It came within two points yesterday.

Dollar/SPX inverse correlation chart. Not much comment necessary here. You can see where the SPX did not follow it's master (cause it's POMO mistress intervened) last week when, in theory, cash should have fallen a bit more as the dollar ramp would indicate. Now that the EUR issues are (at least temporarily) settled, will the dollar continue to slide (commods to rise again barring more margin hikes) thus providing even more fuel to pump price into Xmas and EOY prints?

Index comparison chart - Financials lagging and everyone else hanging around the highs. Will the financials lift again? Given the Fed's release of TARP data and any possible backlash on Fed funding to institutions (both legally domestic and illegally with your tax dollars globally) is yet to be known. Add the fact that Wikileaks is back up and has their revolver pointed squarely at one large banks temple, and you get a brew that may keep the banks under performing for at least another day or two.

Have not shown the CPC chart in a while. This chart says the markets should have topped or are at a minimum nearing a point where a top is near.

Yesterday was a surprise to me (and many others). We should be used to those by now. When playing with a dealer that has a rigged deck and unlimited bankroll (fiat of course), you should expect that. We can't afford any negative emotions thru the Xmas season. Everyday from now thru the 24th needs to have Black Friday hysteria. Get out and trample your neighbor for that $15 toaster.

About Shanky

I am a former financial professional that blogs for fun. I enjoy sharing my thoughts with others on my blogs. I hold nothing back and apologize for the foul language in advance, but dire situations require accurate descriptions. Please feel free to contact me with your thoughts or tips at the email address provided. Enjoy!

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